from the chicken-little dept

If you recall, the wireless industry has spent much of the last decade proclaiming that a "spectrum crunch" was afoot, declaring that unless the government did exactly as requested, wireless growth and innovation would grind to a halt. AT&T was quick to claim that it needed to buy T-Mobile because of said spectrum crunch, though the company's own leaked documents highlighted that this simply wasn't true (this hubris being a big reason the deal was rejected). Verizon has also spent years crying spectrum poverty when convenient, despite repeated analysis showing its holdings lead the industry.

Yes, there is finite spectrum, but as with all network capacity constraints this has increasingly been mitigated by Wi-Fi offloading, new technologies and smart engineering (not to mention unlicensed options and technologies we haven't even conceived yet). If there is a "spectrum crunch," it's predominantly among smaller competitors that lack the resources to buy huge swaths of spectrum, or the political power to get regulators to tilt the entire playing field (and spectrum auction process) in their direction. Of course, both AT&T and Verizon have breathlessly and repeatedly denied that they warehouse extra spectrum to help keep would-be competitors at bay.

After years of warning of spectrum armageddon, Verizon's again making it clear that the entire spectrum crisis was contrived nonsense. After nabbing another $10.4 billion at the recent AWS-3 auction, Verizon CTO Tony Melone this week stated that despite years of claiming spectrum poverty, Verizon never really felt pressured to buy such a huge swath of spectrum:

"In a conference call with investors, Tony Melone, Verizon Communications' executive vice president of network, said that "entering the auction there was no markets where we felt compelled to acquire spectrum, irrespective of the price." Verizon did not feel pressure to aggressively bid for spectrum because it already had at least 40 MHz of AWS-1 spectrum in many U.S. markets, especially in the eastern United States, Melone said."

It's always kind of amusing when the network guys forget to adhere to narratives set by the policy folks (like the Verizon CFO's recent slip up in admitting Title II isn't a big deal). But Melone's comments are a far cry from claims made by Verizon's policy blog just a few years ago, when the company was trying to get regulatory approval for a huge co-marketing deal with the cable industry:

"Rather than waste time arguing about spectrum efficiency, let’s focus on the issue on which we all agree: America’s wireless consumers face a spectrum crunch that won’t be relieved by Verizon’s spectrum purchase. It’s up to the industry, as well as policymakers, to help ensure that more spectrum reaches the marketplace soon, so America’s wireless industry remains the global leader in innovation that it is today."

Said spectrum crisis seems to materialize out of thin air when Verizon needs something, then just as quickly disappears when the company candidly decides to talk about its holdings. Of course, Verizon gets away with this kind of stuff, in part, because the tech press (with the occasional exception) loves to regurgitate company claims unskeptically. And if you've been paying attention, you'll note that congestion has long been a useful bogeyman to scare regulators into bending rules to the benefit of the biggest, least competitive companies. Remember the Exaflood? How about usage caps? Does anybody notice a pattern?

With Verizon's bloated belly full from the recent AWS-3 spectrum purchases, and new technologies constantly evolving to more than meet mobile network demands, that should be the last we hear about Verizon's spectrum shortfall for a long while, right? Of course not. The big telco threat these days is that if the government imposes tough net neutrality protections, we'll see a dramatic decrease in innovation and network investment leading to (you guessed it) network performance and capacity issues (though we've illustrated how these claims too are bunk).

You'd think we'd reach a point, after so many years of false claims, where the press would no longer just take the claims of lumbering, bloated duopolists at face value. If there's a crisis, it remains a crisis of critical thinking.

from the get-over-yourselves dept

FairSearch, the increasingly silly and shrill looking "coalition" of tech companies which have nothing in common other than a visceral hatred for Google (it's led by Microsoft) has so far failed miserably in convincing regulators that Google was an antitrust problem. Now it's filed a new attack on Google in the EU, arguing that its Android mobile strategy is anti-competitive because it gives Android away for free.

“Google is using its Android mobile operating system as a ‘Trojan Horse’ to deceive partners, monopolize the mobile marketplace, and control consumer data,” said Thomas Vinje, Brussels-based counsel to the FairSearch coalition. “We are asking the Commission to move quickly and decisively to protect competition and innovation in this critical market. Failure to act will only embolden Google to repeat its desktop abuses of dominance as consumers increasingly turn to a mobile platform dominated by Google’s Android operating system.”

[....] Google achieved its dominance in the smartphone operating system market by giving Android to device-makers for ‘free.’

What's especially ridiculous here is that Microsoft, who is the major source behind FairSearch, dealt with this exact issue itself back during its antitrust fights, when people ridiculously accused it of the same thing for daring to give out Internet Explorer for "free." The idea that giving away some software for free is somehow anti-competitive is just laughable. That this is now being pushed by a bunch of companies who themselves use the exact same benefits of giving away free software to promote other parts of their business is just the height of cynical exploitation of the political process to try to hamstring a competitor in red tape, rather than competing in the marketplace.

Law Professor James Grimmelman, who is hardly a big Google supporter (he was among those who fought the hardest against the Google Books settlement) properly called this new filing by FairSearch "disgusting." It's a blatantly cynical attempt by Microsoft, Nokia, Expedia, TripAdvisor and Oracle to use a totally bogus legal complaint to just waste a competitor's time. All of those companies rely on free software in some form or another. No one in their right mind argues that offering free software is somehow anti-competitive. It seems that FairSearch has now reached hysterical desperation as it attempts to justify itself.

from the live-by-the-sword dept

It's difficult not to look cynically at Microsoft's latest move to file an antitrust complaint in the EU over Motorola's patent royalty rates, and think about just how obnoxiously hypocritical Microsoft is being as a company on this particular issue. First off, Microsoft has become a pretty significant patent aggressor over the past few years, filing lawsuits and pressuring companies to pay up. It's also been a huge fan of patent FUD -- especially against open source competitors. Most people assume that Microsoft was the main player behind SCO's quixotic (but costly and distracting) legal battle against Linux. Then, of course, every so often Microsoft officials insist that Linux infringes on a bunch of its patents, but it never wants to make clear which ones. More recently, of course, Microsoft has been demanding license fees for its patents from a variety of companies making use of Android -- to the point that some have argued Microsoft makes more off each Android installation than each Microsoft Phone installation.

Of course it was partly Microsoft's aggressive patent position against Android that put Google in the position of feeling compelled to buy Motorola Mobility to get its patent portfolio, mainly for the sake of protecting itself and having a bunch of patents that it could use as a shield against a lawsuit from the likes of Microsoft. Of course, Microsoft was already suing Motorola over the company's use of Android.

A few weeks ago, we discussed the tough spot that Google was in over Motorola's patents. The company has indicated that would keep in place Motorola's current patent licensing strategy. While many of us would prefer that Google make a big statement by freeing or opening up many of these patents, the company is actually in something of a ridiculous position: if it does that... its competitors (mainly Microsoft) will claim anti-trust violations by saying that the company is using its market position to undercut the prices that other charge.

It's other choice? Keep the current rates. And that's what it's indicated it would do... so the second that the EU and the US approved the merger, Microsoft files this antitrust complaint, arguing that the rates Motorola charges for its patents is too high. It's a damned if you do, damned if you don't position for Google. Keep the rates as they are, and they're violating antitrust rules by charging too much. Cut the prices or free up some of the patents, and it's an antitrust issue for leveraging their position and "dumping" in the market.

Of course, Microsoft's almost gleeful blog post about its complaint ignores all of this reality and history, and tries to position it as if Motorola and Google are trying to "kill" web and mobile video by charging too high a royalty rate. Frankly, for anyone who knows anything about Microsoft's patent practices over the past few years, they'll see through this and recognize how laughable Microsoft's claims are.

Either way, the situation is ridiculous. Fighting over patents doesn't help bring any new innovations to market. It just diverts money to the lawyers.

from the did-not-see-that-coming dept

Wow! Well, this is a bit of a surprise. The US government, who had been rubber stamping various mergers for a while now, especially in the telco/broadband space, may finally have had enough. The Justice Department has officially moved to block the merger, technically filing a lawsuit against it on antitrust grounds. From the beginning, most people had assumed that no one would block the merger, though in the last few weeks there were definite rumblings suggesting that the tides were shifting. Even so, having the DOJ jump in with a lawsuit is a surprise. AT&T insists that the move was a surprise to it as well, which is also a bit odd. Typically, the DOJ tends to telegraph this kind of move, in order to either pre-emptively end the merger attempt or to get much greater concessions. It's not entirely clear what pushed the DOJ off the fence on this one, but AT&T accidentally revealing that it had lied about the key reasons for the merger couldn't have helped...

from the please dept

We just wrote about how Max Davis, who's trying to create a silly and totally pointless compulsory licensing system for MMS content was more or less laughed out of court in the lawsuit he filed against the mobile operators, claiming that they were running illegal P2P file sharing programs in the form of their MMS capabilities. It apparently took him all of a few days to come up with a new, perhaps even more ridiculous strategy: he's suing AT&T, Verizon, Sprint, T-Mobile and TracFone for supposed antitrust violations over the same basic issues. Once again, it seems clear that this is an incredibly weak (and almost certainly unproductive) attempt at getting these companies to agree to his pointless licensing scheme.

So how are these mobile operators guilty of antitrust violations? According to Davis:

Defendants purposely conspired via collusion to install themselves as the new primary gate keepers and sole beneficiaries of multimedia content sharing through their new MMS technologies.

Except, of course, that's ridiculous. These companies did agree to set up MMS systems, but that's because they're the mobile operators who run the mobile networks. That's not collusion. And it's not antitrust. The filing gets more ridiculous as it goes on. He claims that these operators do not qualify as DMCA service providers, contrary to the pretty clear language of the law and plenty of case law. The whole thing seems frivolous, and it seems likely that this lawsuit will reach a similar conclusion to the previous one.

from the better-things-to-do dept

The FTC and the DOJ are reportedly holding talks over which group will launch an antitrust inquiry into Apple's policies regarding app development for the iPhone and iPad. Apple recently made a change to the terms of its iPhone SDK, barring developers from using third-party development tools. Apple claims it did this to ensure that iPhone apps are of the highest quality, but the real reason appears to be to push developers to only develop for the iPhone, and not other rival platforms. The behavior may be as annoying as it is unsurprising, but it's hard to see how this warrants antitrust action and government intervention. Apple isn't restricting access to that market completely, they're just forcing developers to use certain tools in order to participate in it. While Apple is trying to throw its weight around for its own benefit, what its doing may not necessarily be illegal -- but that doesn't mean it's a good idea either. This policy seems likely to fail in the marketplace more quickly than any resolution through government intervention could take effect.

from the fair-enough dept

Every so often an article pops up here or there talking about how ridiculous text message prices are on a per-byte basis. Eventually one of those stories got politicians involved, and the Justice Department began an investigation. Thankfully, the inquiry has ended, and the Justice Department found no evidence of anything wrong. Looking at the pricing on a per-byte basis is pointless and mostly meaningless. Most people who use SMS text messages on any sort of regular basis have bulk plans included with their regular plan. The "list" prices are really a small part of the market. The fact that most of the operators raised prices is certainly not evidence alone of any kind of collusion. And if prices really get to be too ridiculous, then people will just start to move to alternatives. This seemed more like an investigation brought on for PR purposes because someone didn't like the way something was priced.

from the not-such-a-good-day-at-apple dept

Last year, we wrote about an antitrust lawsuit filed against Apple for sending an update that disabled, or "bricked," the iPhones of people who had changed the firmware to accept outside programs. While Apple tried to push for a dismissal of the lawsuit, a judge has denied the motion to dismiss and will let the case carry on. While a full-on antitrust finding seems unlikely, there are elements of the case that may get Apple into trouble down the road -- and it all comes back to Apple's Achilles' heel: its desire to control absolutely everything, even after you've bought it. Depending on how this case works out, Apple may discover that it (legally) needs to learn to loosen the strings a bit.

from the trumped-up-controversy dept

Earlier this week, the chairman of the U.S. Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights, Senator Herb Kohl, made a bunch of news for questioning why text message rates have become so high. He implies that because the number of national wireless carriers has shrunk from six to four thanks to mergers, that the four major carriers have too much market power. That sounds great, but is highly misleading -- as evidenced by a new report that notes that the number of text messages being sent is growing rapidly. If the price were such a huge problem, wouldn't that not be the case?

Part of the problem is that the Senator seems to only be looking at the a la carte pricing for text messaging. However, these days, most folks who use text messaging on a regular basis have signed up for some sort of bulk texting plan, that allows them to send hundreds of messages for a set price. The a la carte text message pricing is really only for those who rarely, if ever, use text messaging. Furthermore, if the mobile operators really are constraining the market and push things too far by driving the price even higher, then there are many alternatives that will quickly show up. As we've discussed in the past, it's only a matter of time until other options for messaging become popular on phones, such as instant messaging clients -- which can provide service for free. Once again, it seems like the gov't is stepping in and complaining where there's no real problem.

from the always-gotta-sue dept

While the last class action lawsuit over the iPhone was pretty ridiculous -- claiming that the rapid price drop was illegal -- this latest one may have a bit more substance behind it. One of the victims of the infamous iPhone iBricking update has now filed a class action lawsuit against Apple, claiming that the iBricking action was a violation of California law. The specific arguments are a bit complex, but basically, the guy is claiming that in locking the handset to one carrier, Apple violated sections of the Cartwright Act, which is designed to prevent companies from creating artificial market barriers on products they sell in order to boost the price. On top of that, the lawsuit notes that unlocking a phone for use on other networks is perfectly legal under last year's DMCA exemptions. Therefore, to then brick the iPhones that were unlocked violates the California law, saying that it's illegal to take actions that "substantially lessen competition or tend to create a monopoly." It may be a bit of a stretch to say that applies in this case, and Apple can simply plead (reasonably) that the iBricking was not on purpose, and that the company has no requirement to support unlocked handsets -- but if this case actually does get some traction, Apple may need to be a bit more careful in future firmware updates.